Government accused of putting tobacco firms first

THE Government is being accused of protecting tobacco companies’ profit margins by setting a minimum price for cigarettes.

They have been warned by the EU Commission to abandon this policy and instead keep prices high by raising taxes.

However, the Department of Health has said fixing a minimum price — now e6.79 for 20 — is a good way of preventing young people from starting smoking and of encouraging others to give-up.

The commission has referred Ireland and Austria to court over the issue. “Minimum prices infringe community law, distort competition and benefit only manufacturers,” it said. Keeping prices high is a good way of reducing tobacco consumption, but this can be done through increasing the State’s take through higher excise duty and taxes, it argues.

“These measures have the same effects on prices as setting minimum prices but do not reduce price-based competition to the sole benefit of manufacturers by protecting their profit margins,” a statement said.

The EU Court of Justice has ruled against France on the issue and found it illegal to fix a minimum price where the extra money goes to the tobacco company. The commission warned Ireland in July to comply with EU legislation.

A statement from the Department of Health and Children said their policy is in line with World Health Organisation guidelines that say price and tax on tobacco are good ways to discourage their consumption.